Marlinspike Debt Acquisitions Pty Ltd v The Undone Pty Ltd

[2018] NSWSC 4

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Marlinspike Debt Acquisitions Pty Ltd v The Undone Pty Ltd [2018] NSWSC 4

Hearing dates:

8 January 2018

Date of orders:

12 January 2018

Decision date:

12 January 2018

Jurisdiction:

Common Law

Before:

Davies J

Decision:

(1) Summons dismissed.
(2) The plaintiff and Robert Lyndon Sayer-Jones are to pay the defendants’ costs of the summons.
(3) Subject to orders (1) and (2) herein, the defendants’ notice of motion filed 3 January 2018 is otherwise dismissed.
(4) The plaintiff and Robert Lyndon Sayer-Jones are to pay 90% of the defendants’ costs of the notice of motion.

Catchwords:

ADMINISTRATIVE LAW – prerogative relief – Local Court proceedings – default judgment set aside by Local Court of its own motion – UCPR r 36.17 – affidavit of service non-compliant with Rules and Corporations Act – whether entitlement to be heard – procedural fairness – no practical injustice – appeal rights under Local Court Act – whether appeal rights should be utilised before prerogative relief sought – discretionary grounds for refusing relief – summons dismissed

 

CIVIL PROCEDURE - court administration – court powers - Supreme Court – general jurisdiction under s 23 Supreme Court Act

CIVIL PROCEDURE – appearance - where plaintiff is a corporation – where director seeks leave to appear on company’s behalf – UCPR r 7.1 - need for director to be plaintiff – need for director to have cause of action against defendant – personal undertaking to Court by director

Legislation Cited:

Administrative Decisions Tribunal Act 1997 (NSW)
Corporations Act 2001 (Cth)
Local Court Act 2007 (NSW)
Supreme Court Act 1970 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Adamson v Eve [2009] NSWCA 379
Ashi Pty Limited v Karasco Investments Pty Ltd [2009] NSWSC 780
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Bobolas v Waverley Council (2016) 92 NSWLR 406; [2016] NSWCA 139
Chapmans Ltd v Yandell [1999] NSWCA 361
Coulter v R (1988) 164 CLR 350
Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 197 ALR 389
Elias v The Director of Public Prosecutions (NSW) [2012] NSWCA 302; (2012) 222 A Crim R 286
Evans v Bartlam [1937] AC 473
Gardner v The Dairy Industry Authority of New South Wales (1977) 52 ALJR 180
Katter v Melhem (2015) 90 NSWLR 164; [2015] NSWCA 213
King v Delta Metallics Pty Ltd [2013] FCAFC 93
Lee v Cha & Ors [2008] NSWCA 13
Magnate Projects Pty Limited v Youma Constructions (No 2) Pty Ltd [2005] NSWCA 331
Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475
NSW Breeding and Racing Stables Pty Ltd v Administrative Decisions Tribunal of New South Wales (2001) 53 NSWLR 559; [2001] NSWSC 494
Russell v Duke of Norfolk (1949) 1 All ER 109
Smith v Commissioner of Corrective Services [1978] 1 NSWLR 317
Stead v State Government Insurance Commission (1986) 161 CLR 141
Tanamerah Estates Pty Ltd as the trustee for Alexander Superannuation Fund v Tibra Capital Pty Ltd [2013] NSWCA 266
Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR (NSW) 239

Texts Cited:

Aronson and Others, Judicial Review of Administrative Action and Government Liability (6th ed, Thomson Reuters, Sydney, 2017).

Category:

Principal judgment

Parties:

Marlinspike Debt Acquisitions Pty Ltd (Plaintiff)
The Undone Pty Ltd (First Defendant)
RJC Carriage 2 Pty Ltd (Second Defendant)
Georgia Maree Martin (Third Defendant)
Richard James Crampton (Fourth Defendant)
Sara Donaldson (Fifth Defendant)

Representation:

Counsel:
Robert Sayer-Jones (Plaintiff) (by leave)
C Tam (Defendants)

  Solicitors:
Self-represented (Plaintiff)
Resolve Litigation Lawyers Pty Ltd (Defendants)

File Number(s):

2017/383564

Publication restriction:

Nil

Judgment

The Local Court proceedings

1. On 4 November 2017 a Statement of Claim was filed in the Local Court by Marlinspike Debt Acquisitions Pty Ltd against five defendants as follows:

•   The Undone Pty Ltd (First Defendant)

•   RJC Carriage 2 Pty Ltd (Second Defendant)

•   Georgia Maree Martin (Third Defendant)

•   Richard James Crampton (Fourth Defendant)

•   Sara Donaldson (Fifth Defendant)

2. The pleading simply said this:

These proceedings are brought on the invoice issued against the five addresses of the defendants who have failed to comply with a request to pay the outstanding debt owed to Marlinspike Debt Acquisitions after recieving (sic) an equitible (sic) assignment from Jordan Gravestein acting as a liquidator of Jaromir Holdings following the failed payment of a $35,931 loan (including interest) which was owed and guranteed (sic) by the five defendants.

3. The plaintiff was not represented by a solicitor and the filing of the Statement of Claim appears to have been done by a person described as the authorised officer, Robert Lyndon Sayer-Jones. In fact, Mr Sayer-Jones was the sole shareholder and director of Marlinspike.

4. No defence to the Statement of Claim was filed and on 5 December 2017 a default judgment was entered by the Local Court. Thereafter, between 11 and 15 December 2017 five separate amounts totalling $12,455.19 were garnisheed from the bank accounts of each of the five defendants.

5. On 11 December 2017 one of the directors of the first defendant, Sara Donaldson, noticed that all of the funds had been removed from the ANZ bank account of the first defendant. Upon enquiries being made by her she ascertained that the Local Court at Campbelltown had issued a garnishee order. After contact with the Court Ms Donaldson was provided with a copy with of the Statement of Claim.

6. On 12 December 2017 Ms Donaldson filed a notice of motion and an affidavit to set aside the default judgment.

7. On 13 December 2017 Ms Donaldson received a notice from the Local Court in relation to the proceedings which said this:

On 13 December 2017 the following orders (and/or directions) were made:

The default judgment entered 5/12/17 is set aside pursuant to r.36.17 of the Uniform Civil Procedure Rules 2005, as the affidavit of service filed 10/11/17 is defective. Accordingly, all enforcement action is voided.

8. On the same day an email was sent from the Local Court at Campbelltown to Mr Sayer-Jones in the following terms:

Judgment in this matter has been set aside under Rule 36.17 of the Uniform Civil Procedure Rules 2005 (UCPR), which provides that if there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error.

In this instance, after the filing of the defendant’s notice of motion yesterday it came to notice that the affidavit of service that the plaintiff had filed in support of its motion for default judgment did not meet the requirements of Rule 35.8(2) of the UCPR and Section 109X of the Corporations Act 2001 (Cth). The affidavit of service was defective for a number of reasons including:

•   It referred to service of ‘9 notices of motion' and did not refer to service of the Statement of Claim;

•   It did not fully describe how service was effected in that no information was provided as to the address, (or addresses) to which the Statement of Claim was posted;

•   Service by post on the third, fourth and fifth defendants is not permitted unless such service is undertaken by the Court, and

•   The affidavit was not made by the person who effected service.

For service to be valid, the Court must be satisfied that a sealed copy of the Statement of Claim has been posted to the registered offices or the first and second defendants, and that a sealed copy has been personally served on each of the third, fourth and fifth defendants, or left, addressed to them, at their business or residential address, with a person who is apparently of or above the age of I6 years and apparently employed or residing at that address. Ideally, a separate affidavit of service should be filed in respect of each defendant.

As the judgment entered on 5/12/2017 was based on an invalid affidavit of service the judgment also is invalid and the Court has an obligation to set it aside.

The order made today seeing aside the judgment is an order made by the Registrar of the Court's Online Registry. I have no authority to review another Registrar’s order. Further, the Registrar who made the order has no authority to review his own order (except in the context of Rule 36.17 to correct an error). If you are dissatisfied with the order made by the Registrar today, you may apply to the Court under Rule 49.19 for the order to be reviewed by a Magistrate. Application may be only be made by filing a notice of motion.

As the judgment has been set aside on the Court’s own motion these is no longer a need to consider the defendant's notice of motion and the listing on 12/1/2018 has been vacated.

If you have indeed served sealed copies of the Statement of Claim on the defendants in a manner prescribed under the UCPR, and the defendants have not yet filed a defence you may remedy this situation by filing fresh affidavits of service in valid form together with a fresh notice of motion for default judgment.

Should you require any further information please do not hesitate to contact us by return email, or by contacting our service centre on 1300 679 272.

9. On 14 December 2017 the defendants filed their defence. The defence denied that the plaintiff issued the invoice against them, denied that there was any request to pay an outstanding debt to the plaintiff, denied that they owed the alleged debt or any debt at all to the plaintiff, denied that they owed a debt to Jordan Gravestein acting as a liquidator of Jaromir Holdings, denied that they ever owed a debt to Jordan Gravestein, denied that there was an equitable assignment of a debt from Jordan Gravestein acting as a liquidator of Jaromir Holdings to the plaintiff, denied that Jordan Gravestein was a registered liquidator, denied that they entered into the alleged loan, denied that they ever guaranteed the alleged loan and denied that they were liable to the plaintiff as alleged or at all.

10. Correspondence by way of email then ensued between Mr Sayer-Jones and Resolve Litigation Lawyers acting for the five defendants. Initially the correspondence appeared to relate to the return of garnisheed monies which Mr Sayer-Jones refused to return. On 18 December 2017 Mr Sayer-Jones said that he intended to make an urgent application to the duty judge seeking to set aside the Local Court decision setting aside the default judgment on jurisdictional error grounds because, it was asserted, “the voiding” of the judgment without notice to Mr Sayer-Jones was legally untenable.

The proceedings in this Court

11. On 19 December Marlinspike, through Mr Sayer-Jones, sought ex parte relief in a summons from Rothman J as the vacation duty judge. The interlocutory relief sought involved orders in an endeavour to stop the garnisheed monies being returned to the defendants by the ANZ Bank and orders preventing the defendants and their solicitors from relying on the fact that, as it was put, the judgment had been “voided”. The relief also sought an order staying the Local Court decision.

12. The substantive relief in respect of which the interlocutory relief was sought, was as follows:

7.   A declaration that the order voiding the judgment on 12th December 2017 of Marlinspike Debt Acquisitions Pty Ltd against the Undone parties by the Local Court was contrary to procedural fairness, natural justice, and is set aside as manifestly unjust;

8.   A declaration that the plaintiff is entitled, as a matter of right, to perfect the record by swearing affidavits of service to overcome any procedural problems with an irregularly entered judgment;

9.   A declaration that the Local Court committed jurisdictional error by not providing Marlinspike Debt Acquisitions (including its servants and agents) an opportunity to perfect the record;

10.   A declaration that any orders made by the Local Court at Campbelltown following the wrongful voiding of the judgment are void;

11.   An order for a lump sum costs order in these proceedings;

12.   A charging order issue under the Uniform Procedure Rules against the defendants shares in the Undone Pty Ltd to ensure enforcement of Marlinspike's judgment in lieu of costs being unpaid;

13.   An order under the Uniform Procedure Rules directing the NSW Sheriff to execute a writ against land at 28 Ethel Street Balgowlah in the name of Richard James Crampton in lieu of costs being unpaid.

13. Apart from making procedural directions with a view to the matter coming before the vacation judge with both parties present, Rothman J made this order:

4.   The Court further orders, until 4pm 10 January 2018, or until further order of the Court, that all orders of the Local Court, including directions for the filing of any document in Marlinspike Debt Acquisitions Pty Ltd ACN 62086689 v The Undone Pty Ltd RJC Carriage 2 Pty Ltd, Georgia Maree Martin, Richard James Crampton and Sara Donaldson be stayed.

The matter was then listed before the vacation judge on 9 January 2018.

14. On 3 January 2018 the defendants filed a notice of motion seeking these orders:

1. The proceedings in the Local Court matter, Marlinspike Debt Acquisitions Pty Ltd v The Undone Pty Ltd, RJC Carriage 2 Pty Ltd, Georgia Maree Martin, Richard James Crampton and Sara Donaldson (case number 2017/00333976) (the Local Court Proceedings), are dismissed pursuant to rule 13.4 of the UCPR.

2. These proceedings are dismissed pursuant to rule 13.4 of the UCPR.

3.   The Plaintiff is to pay the amount of $2,959.60 into the trust account of the Defendants' lawyers (Resolve Litigation Lawyers) on account of the money garnished from the Defendants' bank accounts in the Local Court Proceedings.

4.   The Defendants' costs, on an indemnity basis, to be paid by the Plaintiff and Mr Robert Sayer-Jones.

5.   The Defendants' costs of the Local Court Proceedings, on an indemnity basis, to be paid by the Plaintiff and Mr Robert Sayer-Jones.

6.   Such further or other orders as the Court sees fit.

15. The third, fourth and fifth defendants swore affidavits for themselves and on behalf of the first and second defendants.

16. The fourth defendant deposed in an affidavit to the defendants collectively receiving eight envelopes sent by registered post between 11 and 16 November 2017. Two were addressed to the first defendant, two to the second defendant, one to the third defendant, one to the fourth defendant and two to the fifth defendant. All of the envelopes contained one piece of blank A4 paper. None of the envelopes had a return address except for the envelope addressed to the third defendant, but that address had been crossed out with black permanent marker. When it became clear that none of the defendants knew anything about these letters, the fourth defendant sent an email to the companies’ employees telling them what had happened and warning them to be alert as far as electronic and financial sabotage was concerned.

17. After Ms Donaldson received a copy of the Local Court Statement of Claim searches and enquiries were conducted by the defendants. Mr Crampton deposed to the fact that the only person found on a Google search of Jordan Gravestein was a real estate agent in Melbourne who told Mr Crampton that he had no knowledge of the plaintiff and had never acted as a liquidator. Mr Crampton also deposed to the fact that searches of the company called Jaromir Holdings disclosed that no such company existed.

18. Each of the three personal defendants swore in their affidavits that they had never heard of, nor been aware of:

(a)   The plaintiff;

(b)   Mr Sayer-Jones;

(c)   Jordan Gravestein;

(d)   Jaromir Holdings;

(e)   Any loan between the defendant companies and Jaromir Holdings;

(f)   Any guarantee concerning the defendant companies, Jaromir Holdings or the other directors;

(g)   Any assignment of any debt from Mr Gravestein acting as a liquidator or otherwise to Marlinspike;

(h)   The invoice referred to in the Statement of Claim;

(i)   Any debt that the first defendant or any of other defendants owed to the plaintiff.

19. Mr Crampton further deposed to contacting the Redfern police about the matter.

20. On 19 December 2017 the Defendants’ solicitors wrote a letter to the plaintiff and requested certain specified documents be produced. A notice to produce was also served pursuant to r 21.10 UCPR. These documents have not been produced because Mr Sayer-Jones asserted (wrongly) a number of times in emails that because no conduct money had been served with the notice to produce he was not obliged to produce the documents.

21. The matter came before me on 9 January 2018 initially to hear the defendants’ notice of motion filed 3 January 2018. However, because of the terms of the stay order made by Rothman J I would need to have determined whether the stay should be extended to the date on which the final relief sought by the plaintiff in the summons was heard. Both parties agreed that they were in a position to argue the final relief sought in the summons. From the point of view of minimising costs I considered that that was the appropriate course to be followed.

Submissions

22. When the matter was called on, I gave leave to Mr Sayer-Jones, although not a lawyer, to appear for the plaintiff in the circumstances more particularly detailed later in the judgment. At the outset of his submissions Mr Sayer-Jones made clear that he sought the relief contained in prayers 7, 8, 9 and 10 of the summons, that he was not appealing under the Local Court Act 2007 (NSW), and that although prayers 7, 8, 9 and 10 sought only declarations, in substance he sought prerogative relief in the nature of certiorari and mandamus.

23. Mr Sayer-Jones submitted that the Local Court should not have set aside the default judgment without giving notice to him in advance so that he could file an appropriate affidavit of service to maintain the default judgment. In this way he was denied procedural fairness and that meant there was jurisdictional error on the part of the Local Court.

24. He submitted that the practical effect of the Local Court’s order was to deny him the ability to issue a statutory demand on the first and second defendants, to garnishee the defendants’ moneys, and the right to argue that the fifth defendant’s notice of motion to set aside the default judgment should be struck out and that Ms Donaldson was being dishonest in denying service.

25. He relied on the approach taken by the Court of Appeal in Bobolas v Waverley Council (2016) 92 NSWLR 406; [2016] NSWCA 139 and Katter v Melhem (2015) 90 NSWLR 164; [2015] NSWCA 213.

26. He submitted that the issue raised by his Summons was of general importance, that is, whether any court could of its own motion act under the slip rule without notice to the parties.

27. After I had reserved my decision in the matter, Mr Sayer-Jones sent an email to my associate drawing my attention to the decision in Adamson v Eve [2009] NSWCA 379. He said he relied on that case at [53] to [73]. This was despite my having refused leave to Mr Sayer-Jones to lodge further submissions after the end of oral argument.

Procedural unfairness

28. Rule 36.17 UCPR provides:

36.17 Correction of judgment or order (“slip rule”) (cf SCR Part 20, rule 10; DCR Part 17, rule 10; LCR Part 16, rule 10)

If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error.

29. It should be noted that, unlike rules 36.15 and 13.16, r 36.17 enables the Court of its own motion to correct the mistake or error.

30. Rule 16.6 UCPR requires an affidavit in support of an application for default judgment. One of the requirements of the affidavit is that it must state when and how the originating process was served on the defendant. Rule 35.8(2) sets out what information must be included in an affidavit of service. Section 109X of the Corporations Act 2001 (Cth) sets out the requirements for service of documents on a company.

29. In his affidavit in support of the Summons Mr Sayer-Jones did not annex the affidavit of service upon which default judgment was granted. Nor was a copy of it tendered at the hearing before me. However, his submissions proceeded on the assumption that the affidavit did not, as the Local Court detailed in its email to him, adequately prove service. He did not suggest that if the Local Court had notified him of the defects it perceived he would have sought to argue that the affidavit complied with the rule.

30. Mr Sayer-Jones was not able to point to any authority which held that a court when exercising its powers under r 36.17 of its own motion was required to give notice to the parties before doing so. In the particular circumstances of this case I do not consider that the Local Court was under such an obligation for the reasons which follow.

31. In Russell v Duke of Norfolk (1949) 1 All ER 109 at 118 Tucker LJ said:

The requirements of natural justice must depend on the circumstances of the case, the nature of the enquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with, and so forth. Accordingly, I do not derive much assistance from the definitions of natural justice which have been from time to time used, but, whatever standard is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case.

As was noted in Judicial Review of Administrative Action and Government Liability (Aronson and Others, 6th edition, Thomson Reuters, Sydney, 2017) at [8.50], that passage has been approved many times by the High Court. Similarly, Kitto J said in Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475 at 504:

What the law requires in the discharge of a quasi-judicial function is judicial fairness. That is not a label for any fixed body of rules. What is fair in a given situation depends upon the circumstances.

34. What is set out in Adamson v Eve at [53] to [73] is a useful summary of the law concerning the audi alteram parti rule. I have had regard to the principles enunciated in that judgment but as Campbell JA said, having set out the principles:

[73]    Deciding whether Mr Adamson has been denied procedural fairness requires a closer examination of the facts relevant to his specific complaints, and considering them in the light of the principles I have earlier outlined.

35. The issue in that case was whether a judge who is contemplating making unfavourable findings about a party’s credit should give them the opportunity to be heard. In the result, the Court of Appeal determined at [119] that it was not necessary that the party be warned of the intended findings. Unlike the present case, no question arose in Adamson v Eve about whether practical injustice flowed from any denial of the right to be heard.

36. If the denial of procedural fairness would not produce any practical injustice there is no entitlement to relief. In Stead v State Government Insurance Commission (1986) 161 CLR 141 the High Court said (at 145):

The general principle applicable in the present circumstances was well expressed by the English Court of Appeal (Denning, Romer and Parker L.JJ.) in Jones v. National Coal Board [1957] 2 QB 55 at 67 , in these terms:

There is one thing to which everyone in this country is entitled, and that is a fair trial at which he can put his case properly before the judge. No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it.

That general principle is, however, subject to an important qualification which Bollen J. plainly had in mind in identifying the practical question as being: Would further information possibly have made any difference? That qualification is that an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility.

For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial.

37. In King v Delta Metallics Pty Ltd [2013] FCAFC 93 the Full Court of the Federal Court said:

[58] Finally, even if there was a denial of procedural fairness, it does not follow that the appellant is entitled to relief.

[59] In order to attract relief the denial of procedural fairness must work a practical injustice on the appellant: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at [38] per Gleeson CJ. If the denial of procedural fairness would have made no difference to the outcome of the proceeding, relief will not be granted: Stead v State Government Insurance Commission (1986) 161 CLR 141. The court is concerned with matters of substance, not of mere form: R v Chief Constable of the Thames Valley Police; Ex parte Cotton [1990] IRLR 344 at 351 per Bingham LJ.

[60] In the present case any denial of procedural fairness did not work a practical injustice. As a matter of substance, the denial of procedural fairness made no difference to the outcome.

38. No substantive rights of the plaintiff were affected by the setting aside of the judgment. The plaintiff did not lead evidence nor suggest, as I have noted, that the matters in the Local Court’s email concerning the deficiencies in the affidavit of service were not correct. That being so, it was a question of law whether the affidavit complied with rule 35.8(2) UCPR and s 109X of the Corporations Act 2001 (Cth). With the defects listed, the affidavit did not comply. The plaintiff could not have successfully argued otherwise: Stead at 145.

39. The result would have been that the judgment would have been set aside until the plaintiff properly proved due service. However, prior to the default judgment being set aside, the defendants had filed a notice of motion to set aside the judgment and file a defence. If notice had been given to the parties of the court’s intention to set aside the judgment the defendants would have filed their defence as soon as the judgment was set aside as I have held that it would have been. The position would then have been as it is now, with contested proceedings on foot and the plaintiff needing to prove its case.

40. The plaintiff was not, by the setting aside of the judgment, thereby prevented from seeking again to obtain default judgment with a complying affidavit. However, the notice to the parties would have resulted in a defence being filed as soon as that judgment was set aside.

41. The plaintiff was not deprived of issuing a statutory demand nor garnisheeing the defendants’ accounts by the setting aside of the judgment. It had already garnisheed the accounts and it had made a decision not to issue a statutory demand at least up until the time the judgment was set aside.

42. The plaintiff was not deprived from arguing that the defendants’ notice of motion to set aside the default judgment should itself be set aside because once the defence was filed that notice of motion would become unnecessary.

43. Any denial of procedural fairness has made no difference to the outcome of the proceedings. The present position has been reached because the affidavit of service did not comply with the Rules and s 109X, not because the judgment was set aside without notice to the parties.

44. If I am wrong in that conclusion, there seems to me to be a number of discretionary reasons why the relief sought by the plaintiff should be refused.

45. First, the Local Court Act provides appeal rights from decisions of the Local Court. Section 39(1) provides an appeal as of right confined to a question of law. It may be accepted that a question whether procedural fairness has been denied is a question of law. However, s 40(2) requires leave to be granted by this Court if what is sought to be challenged is an interlocutory judgment or order. There can be no doubt that the order setting aside the default judgment was an interlocutory judgment or order.

46. Two matters flow from this. The first is the question of whether statutory appeals should be pursued before prerogative relief is claimed. In Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 197 ALR 389 Gummow and Callinan JJ said at [33]:

Relief under s 75(v) of the Constitution is, like prerogative relief generally, discretionary. One often compelling discretionary bar is the availability of other relief.

47. In NSW Breeding and Racing Stables Pty Ltd v Administrative Decisions Tribunal of New South Wales (2001) 53 NSWLR 559; [2001] NSWSC 494 Barrett J held that where adequate provision was made in the Administrative Decisions Tribunal Act 1997 (NSW) for a plaintiff to seek review of decisions of the tribunal that it sought to challenge by way of an appeal to an appeal panel, the application for judicial review of the decisions should be refused.

48. In Elias v The Director of Public Prosecutions (NSW) [2012] NSWCA 302; [2012] 222 A Crim R 286 Basten JA (with whom Beazley JA agreed) said at [3]:

… [I]n exercising the supervisory jurisdiction of this Court, a relevant factor militating against the grant of relief will be the failure of the applicant to avail himself or herself of the appropriate appeal procedure, which in this case is s 5B of the Criminal Appeal Act.

49. The weight of authority favours the view that where an appeal process is provided in the relevant legislation, that process should be followed. A further reason for that view in the present case is that, if the appeal process had been followed, it would be necessary for the plaintiff to seek leave because the decision appealed from was an interlocutory judgment or order. In those circumstances it is appropriate to exercise the discretion involved, in determining whether an order in the nature of certiorari should be made, by reference to principles that would be applied where leave was necessary to bring an appeal.

50. In Coulter v R (1988) 164 CLR 350 Deane and Gaudron JJ said at 359 that a requirement for leave to appeal was a “control device” that both promotes the availability and efficiency of justice and places a constraint on the costs of litigation.

51. In Chapmans Ltd v Yandell [1999] NSWCA 361 Fitzgerald JA (with whom Mason P and Davies AJA agreed) said:

[10]   Given the nature of the appeal under s208M of the [Legal Profession] Act [1987], I am satisfied that a master to whom an application for leave to appeal is made under that section should consider any material evidence which bears upon whether or not leave to appeal should be granted, including evidence which bears upon the likely outcome of the appeal if leave is granted: …

[11]   On the other hand, it is important to keep in mind the purpose of a requirement of leave to appeal. It is intended to act as a filter to ensure that unsuitable appellant proceedings which are not able to be brought with the demands which that places upon the resources of the Court and the burden which it places upon other parties and the delays which it causes to other litigants. …

[12]   It is also in my opinion important to keep in mind that s208M must be considered in the context of s208L, which restricts an appeal as of right to matters of law. In considering whether or not leave to appeal is granted, it must be decided whether or not, there not being a matter of law arising in the proceeding and there being an appeal as of right only as to a matter of law, there is some other matter which in justice requires that leave to appeal be granted to allow that matter to be relitigated. The party seeking leave to appeal obviously bears the burden of establishing that justice does require that leave to appeal be granted. Further, the master when considering whether to grant leave to appeal obviously has a very wide discretion: …” (citations omitted)

52. In Ashi Pty Limited v Karasco Investments Pty Ltd [2009] NSWSC 780 I concluded, from what Fitzgerald JA had said in Chapmans Ltd, as follows:

[34]   The result is, in my opinion, that the party seeking leave to appeal needs to point to some other matter which in justice requires that leave to appeal be granted.

[35]   Ashi was not able to identify any additional matter over and above the error of principle or law which the Magistrate was said to have made, apart from an assertion that it had suffered a detriment. In my opinion, it could reasonably be expected that any party appealing or seeking leave to appeal had suffered a detriment. That in itself cannot be an additional matter that justice requires leave to be granted.

53. In the circumstances of this case, if leave had been sought to appeal under s 40 of the Local Court Act, I would have refused leave because the plaintiff cannot point to any additional matter over and above the error of law. Any assumed error on the part of the Local Court did not affect the plaintiff’s substantive rights. The only practical detriment was that the plaintiff would have to prove its case against the defendants. The likelihood of the plaintiff having to do that in any event was very high to the point of being inevitable for the reasons I have given at [38]-[39] above.

54. Quite apart from that, the defendants had filed a notice of motion to set aside the default judgment on the basis, not only that they had not been served with the statement of claim (there is strong prima facie evidence for that fact in the affidavit of Mr Crampton) and, hence, explaining why they had not filed a defence, but also on the basis that they had a reasonably arguable defence to the claim (there was strong evidence in the affidavits of each of the third, fourth and fifth defendants to that effect). Those are the two matters which justify a default judgment being set aside: Magnate Projects Pty Limited v Youma Constructions (No 2) Pty Ltd [2005] NSWCA 331 at [48]; Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR (NSW) 239 at 243; Evans v Bartlam [1937] AC 473 at 480, 482, 488-9. I consider that it would be highly unlikely that the Local Court would not have set aside the default judgment based on that evidence. Contrary to Mr Sayer-Jones’s submission, there would be no issue on such an application about Ms Donaldson’s honesty.

55. A second discretionary reason why relief should be refused is closely related to the foregoing point. What is sought is judicial review of an interlocutory decision. To allow review in those circumstances results in a fragmentation of proceedings. The courts have stressed on a number of occasions the undesirability of interrupting committal proceedings (Smith v Commissioner of Corrective Services [1978] 1 NSWLR 317 at 321-322 and 329) but the principle applies more widely.

56. In Lee v Cha & Ors [2008] NSWCA 13 the Court of Appeal had to consider an application for judicial review from a refusal by a judge during a civil trial in the District Court to disqualify herself for bias. Justice Basten (with whom Hodgson and Bell JJA agreed) said:

[35]   The second factor which militates against intervening at this stage of the present proceedings concerns the contestable basis of the application. Where a ground relied upon for prohibition demonstrates a patent or manifest want of jurisdiction on the part of the tribunal below, it may well be appropriate to intervene at an early stage to prevent the continuation of such proceedings. In other cases, early intervention may be appropriate because there is no remedy available by way of appeal or other challenge to a final determination: c.f. The Queen v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100 at 118-119; Solution 6 Holdings Pty Ltd, 60 NSWLR 558 at [140]-[145] (Spigelman CJ, Mason P and Handley JA relevantly agreeing), as approved in Fish v Solution 6 Holdings Ltd [2006] HCA 22; (2006) 225 CLR 180 at [44], c.f. comments in dissent of Kirby J at [141]-[142] and Heydon J at [174]-[177].

[36]   In other circumstances, the Court will be required to exercise restraint and not interfere in proceedings at an interlocutory stage in the absence of some clear reason to do so, sufficient to outweigh “the undesirability of discontinuity, disruption or delay” in the established procedures of the law: see comment of the Full Court of the Federal Court in Lamb v Moss (1983) 49 ALR 533 at 545, referring to the established line of authority in respect of intervention in committal proceedings, applying, in particular, Sankey v Whitlam (1978) 142 CLR 1 at 25-26 (Gibbs ACJ), 80 (Stephen J) and 81-82 (Mason J). As the Full Court (constituted by Bowen CJ, Sheppard and Fitzgerald JJ) further noted, a similar approach had been adopted by this Court in Moss v Brown [1979] 1 NSWLR 114 at 132 where the Court (Moffitt P, Reynolds and Hutley JJA) noted, on the assumption that the Court had jurisdiction to grant relief:

“However, on any basis, the occasions in which this Court should, in the proper exercise of its discretion, entertain applications for orders in the nature of prerogative remedies or declarations in relation to committal proceedings must be exceedingly rare. For example, a statement of intention, or a revocable decision concerning the future conduct of the inquiry, or an interim refusal to adopt some course, could hardly provide an appropriate basis for the exercise of any jurisdiction which the Court has.”

[37]   The undesirability of interrupting committal proceedings was noted in more detail in Smith v Commissioner of Corrective Services [1978] 1 NSWLR 317 at 321-322 (Moffitt P) and at 329 (Hutley JA), Glass JA agreeing with both. It may, of course, be said that committal proceedings differ in material respects from civil trials. Nevertheless, the undesirability of interrupting the ordinary course of proceedings has force in each case: see, generally, Cain v Glass (No. 2) (1985) 3 NSWLR 230 at 235 (Kirby P), 253E (McHugh JA); Anderson v Attorney-General (NSW) (1987) 10 NSWLR 198 at 200-202 (Kirby P); 204-205 (Samuels JA) and 214 (McHugh JA).

57. As I noted earlier, Mr Sayer-Jones said that despite the wording of the final relief sought in the summons (declarations) he intended thereby to seek prerogative relief. Even if he had sought only declarations I would have declined to make such declarations on the basis that they would have produced no foreseeable consequences for the plaintiff in the light of the nature of the order made by the Local Court (the setting aside of a default judgment) and the fact that if it were not set aside for the reason given by the Local Court it was highly likely to be set aside on the basis of the notice of motion filed by the defendants: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582; Gardner v The Dairy Industry Authority of New South Wales (1977) 52 ALJR 180 at 188.

58. For these reasons, the summons should be dismissed.

The defendants’ motion

59. The relief sought in the defendants’ notice of motion survives a dismissal of the summons because the motion seeks that the proceedings in the Local Court be dismissed pursuant to rule 13.4 UCPR and that the plaintiff pay the amount of $2,959.60 into the trust account of Resolve Litigation Lawyers on account of the money garnisheed from the Defendants' bank accounts.

60. The basis for the dismissal pursuant to r 13.4 was said to be s 23 of the Supreme Court Act 1970 (NSW) which provides:

23 Jurisdiction generally

The Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales.

61. I can see no basis upon which s 23 could be invoked for this Court to terminate proceedings in an inferior court except as provided by statute in respect of an appeal from the inferior court or by reason of this Court’s supervisory jurisdiction over inferior courts and tribunals.

61. The defendants do not point to any particular decision of the Local Court in respect of the proceedings between the parties that may be brought by way of an appeal under ss 39 or 40. Nor do they point to any decision of the Local Court susceptible to prerogative relief by way of certiorari. At best, the relief sought that the proceedings be dismissed pursuant to r 13. 4 would need to be understood as the defendants seeking an order of prohibition to prevent the Local Court continuing with the proceedings.

62. The essence of prohibition is to prevent an impugned decision maker from relying on a decision from either doing something illegal which the decision maker is about to do, or from continuing on an unlawful cause of action already commenced: Judicial Review of Administrative Action and Government Liability at [12.20]. There is nothing in the present case to suggest any unlawfulness on the part of the Local Court whether past or anticipated. The basis for the defendants’ claim is that the plaintiff’s proceedings are doomed to fail and should now be brought to an end. The appropriate way for that matter to be dealt with is for the defendants to file a notice of motion pursuant to r 13.4 in the Local Court.

63. As far as the claim for the payment of money to the defendants’ lawyers is concerned, that was a matter which flowed from the judgment in the Local Court which has now been set aside. If monies have been paid to satisfy a judgment that has been set aside the appropriate procedure is for the party claiming the money to seek the repayment of that money in the court that gave the judgment pursuant to which execution was effected. The plaintiff, in any event, resists that order on the basis that it will seek to set off that amount against other sums which are owing to the plaintiff arising out of the matters the subject of the Local Court proceedings. Whether or not such a set-off should be allowed is a matter for the Local Court to determine in the light of the further prosecution of the Local Court proceedings.

Costs

65. Since the summons is being dismissed, the usual order is that the plaintiff should pay the defendants’ costs. No submissions were made by the plaintiff to the contrary.

66. The defendants seek, however, that their costs be paid on an indemnity basis and that the order be against the plaintiff and Mr Sayer-Jones.

67. At the outset of the hearing Mr Sayer-Jones sought leave to appear on behalf of the plaintiff. However, there had been no compliance with r 7.2 UCPR for the provision of an affidavit as to Mr Sayer-Jones’ authority to carry on the proceedings on the plaintiff’s behalf. Evidence tendered on behalf of the defendants showed that at the time the proceedings were commenced Mr Sayer-Jones was the sole shareholder and director of the plaintiff. For reasons that were never adequately explained, after Rothman J made his orders Mr Sayer-Jones changed the shareholding in the plaintiff so that a company called Agglomerazione Recoveries Pty Ltd became the sole shareholder of the plaintiff. The evidence also showed that Mr Sayer-Jones was the sole director and shareholder of Agglomerazione. In those circumstances, I was prepared to waive the requirement of the Rules for the affidavit of authority since it would, presumably, be supplied by Mr Sayer-Jones.

68. However, r 7.1 UCPR relevantly provides:

7.1 By whom proceedings may be commenced and carried on

(cf SCR Part 4, rules 4 and 4A, Part 66, rule 1; Act No 9 1973, section 43; Act No 11 1970, section 11)

…

(2)   A company within the meaning of the Corporations Act 2001 of the Commonwealth:

(a)   may commence and carry on proceedings in any court by a solicitor or by a director of the company, and

(b)   may commence and, unless the court orders otherwise, carry on proceedings in the Local Court by a duly authorised officer or employee of the company.

(3)   In the case of proceedings in the Supreme Court, subrule (2) (a) authorises a company to commence proceedings by a director only if the director is also a plaintiff in the proceedings.

69. Rule 7.1(3) was not complied with because Mr Sayer-Jones was not a party to the present proceedings. Moreover, as the Court of Appeal made clear in Tanamerah Estates Pty Ltd as the trustee for Alexander Superannuation Fund v Tibra Capital Pty Ltd [2013] NSWCA 266 at [15]-[16], Mr Sayer-Jones would need not only to be a plaintiff but would need to have a cause of action himself against the defendants. As the Court of Appeal said at [16] the requirement in r 7.1(3) provides a degree of protection to a defendant against incurring legal costs which may be irrecoverable from the corporate plaintiff.

70. Mr Sayer-Jones was not able to point to any cause of action that he personally had against the defendants. I then indicated that a way around the problem would be if Mr Sayer-Jones was prepared to give a personal undertaking to the Court, the breach of which would amount to contempt of Court, to pay any costs incurred by the defendants if costs were ordered against the plaintiff. Mr Sayer-Jones indicated that he was prepared to give that undertaking to the Court and did so.

71. Prior to that undertaking being given the defendants had prepared submissions in support of the prayer for relief in the notice of motion that costs should be payable by both the plaintiff and Mr Sayer-Jones. It is, therefore, not necessary, to consider those submissions.

72. The remaining issue is whether the costs payable by the plaintiff and Mr Sayer-Jones should be payable on an indemnity basis or on the ordinary basis.

73. The defendants submitted that the plaintiff acted unreasonably in prolonging the litigation and by engaging in the conduct demonstrated in the voluminous email correspondence passing between the parties. It was submitted that this caused the defendants to incur substantially more legal costs than they might otherwise have done.

74. Mr Sayer-Jones submitted that whilst his conduct in sending the emails was “admittedly aggressive and mildly dishonourable”, it was not the sort of conduct which was manifestly unreasonable if he was correct in asserting that he was denied natural justice.

75. In my opinion, no proper basis is shown for ordering costs other than on the ordinary basis. It cannot be said that the proceedings have been unduly or unreasonably prolonged. They were commenced on 19 December 2017 and the final hearing took place on 9 January 2018. Given the stage the proceedings had reached when the defendants first became aware of them, it would be a surprise if there was, in any event, much difference in the quantum of any costs whether assessed on the ordinary basis or the indemnity basis.

76. Criticism can certainly be levelled at Mr Sayer-Jones for the tone of his communications, for the assertions made in a number of his emails and for the unnecessary volume of those emails. However, although he appears to have some legal understanding or training he cannot be treated in that regard as if he was a lawyer who owed the sort of duties both to the Court and to other parties in the conduct of litigation that membership of the legal profession requires.

77. Although Mr Sayer-Jones was critical of the defendants for having “elided” the issue in the present proceedings (whether procedural fairness had been denied in the Local Court) and the issue in the substantive proceedings in the Local Court (whether the debt was owed), in the circumstances in which the defendants became apprised of the litigation, no criticism can be directed at them or their solicitors for endeavouring to ascertain the factual background to understand how the position had been reached that there was a judgment against the defendants and that the plaintiff had sought ex parte orders in this Court to stay the Local Court proceedings.

78. Whilst it is obviously a matter for the costs assessor to determine what costs are payable on the ordinary basis by the plaintiff and Mr Sayer-Jones to the defendants, I express the view that no reason has been shown for why the defendants should not recover the costs incurred by them for their solicitors having to deal with the voluminous email correspondence between 14 December 2017 and 8 January 2018 which I note comprised almost 100 pages of hard copy.

79. Although the defendants have largely been unsuccessful on their notice of motion, I record that the vast majority of the hearing time was taken up with the argument in relation to the summons, with prayers 1 and 3 in the defendants’ notice of motion being briefly mentioned only. The evidence filed in support of the notice of motion was relevant to the determination of the issues argued on the summons. In all of those circumstances I consider that the plaintiff and Mr Sayer-Jones should be required to pay 90% of the defendants’ costs of the motion.

Conclusion

80. Accordingly, I make the following orders:

(1)   Summons dismissed.

(2)   The plaintiff and Robert Lyndon Sayer-Jones are to pay the defendants’ costs of the summons.

(3)   Subject to orders (1) and (2) herein, the defendants’ notice of motion filed 3 January 2018 is otherwise dismissed.

(4)   The plaintiff and Robert Lyndon Sayer-Jones are to pay 90% of the defendants’ costs of the notice of motion.

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Amendments

08 April 2025 - Publication restriction lifted.

Decision last updated: 08 April 2025